The Canadian dollar jumped against its US peer yesterday, but backed off a little today. The currency maintained its gains versus the Japanese yen. The euro was too strong after the European Central Bank policy meeting and the loonie could not compete with the shared European currency.
The Canadian trade balance deficit narrowed from C$332 million in December to C$237 million in January. Market participants have feared that the trade gap would widen to about C$600 million. Other reports were not as good, including building approvals, which grew 1.7 percent in January from December, noticeably slower than analysts have predicted (5.4 percent). Still, this was a better reading that the December’s drop by 10.4 percent.
Crude oil climbed as much as 1.1 percent to $91.43 a barrel in New York. Positive fundamental data from the United States, the biggest Canada’s trading partner, also helped the loonie (as the Canadian currency is nicknamed).
USD/CAD dropped from 1.0317 to 1.0283, but bounced to 1.0303 as of 2:27 GMT today. EUR/CAD went up from 1.3379 to 1.3489 and stayed near this level at today’s session. CAD/JPY rose to 92.31 after climbing from 91.11 to 92.07.
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